It is time for Infosys chairman and co-chairman to step down: Infosys ex-CFO V Balakrishnan

"I think the most important thing is to first restructure the board, let go some of the board members and then have an ideal balance in the board which will create the checks and balances."Chandra R Srikanth | ET Now | August 22, 2017, 08:46 IST

"I think the governance standards in the company has deteriorated in the last few years," he said.In a chat with ET Now, V Balakrishnan, Former CFO, Infosys, talks about the turbulence in the IT bellwether. Edited excerpts:

ET Now: There is news that the founders will participate in the buyback?

V Balakrishnan: No I do not know whether the founders will participate or not. You had asked them. But I think what has happened in Infosys, the board has led down the investors.

The corporate governance has been very poor. You have several instances starting from the severance pay to ex-CFO, to the ex-legal counsel to the Panaya issue, I think the answers are not forthcoming.

All we heard was there was investigation and they have given a clean chit. The shareholders have the right to know when you spend Rs 10 crore of shareholders money in doing investigation.

They have a right to know what what is the conclusion and what is the process they have gone through. The scope of any investigation is very important. We have to see whether the scope is defined properly.

So I think the board has failed in multiple fronts and that is why earlier I said Seshasayee should step down to make sure the board approaches the founders. I think the time has come for the chairman and the co-chairman to step down. I think the audit committee chair and the nomination committee chair should also take responsibility.

ET Now: Which could be Roopa Kudva and Jeff Lehman…

V Balakrishnan: Yes, both of them should step down. If all the four people step down, some new members come into the board and they talk to the founders and take help in searching for a new CEO. I think that is the only way forward. No CEO is going to join if the acrimony between the founders and the board is going to continue.

ET Now: Lot of criticism is also being directed at Mr Narayana Murthy. How do you react to news reports like that?

V Balakrishnan: You have to clearly see what are the issues. Murthy never raised any issue on Vishal Sikka's performance. There were some board members who privately went and told him Vishal is not a CEO material. He is a CTO material. Murthy never said that.

All he had been talking about all along is the governance practices, disclosure practices which Infosys always had been known for. He wanted corrective action. If he wanted power, he would not have left in 2014.

The whole founders left together and gave it to a professional board. It was a good experiment because you need to move from a founder-run company to a professionally managed company. They all left together to give freedom to the new CEO to run the business. But what happened is a collective failure of the board.

ET Now: Mr Murthy is someone who has always held a lot of premium on data. So is there data to back his convictions that there has been wrongdoing?

V Balakrishnan: Look at the whistleblower complaints. These are all serious complaints. The whistleblower said some people in the management have personally benefited in some of the transactions. When you have a serious allegation like this, the board should come out clean. Here you have a board which does not want to explain, which does not want to give all the information to the shareholders and always says they are clean.

ET Now: But is it just Mr Murthy who is not believing them? Do they have support of other institutional investors, other founders because we have not heard from anyone else?

V Balakrishnan: Some people are very vocal, some people do not talk but all of them have the same view and a lot of shareholders also reached out to Murthy.

ET Now: You are talking about investors?

V Balakrishnan: Yes, investors also reached out to Murthy. They also are concerned about all the recent events in Infosys and they all wanted corrective action. Probably they would have met the board also and expressed their concern. All I am saying is the Board has not done enough to alleviate concerns of investors.

ET Now: In terms of the CEO selection, what is going to happen there? Is there any chance of attracting an external candidate?

V Balakrishnan: I think the CEO selection is not the most important thing. I think the most important thing is to first restructure the board, let go some of the board members and then have an ideal balance in the board which will create the checks and balances. Then only a good CEO will come and join.

ET Now: Will you be playing any role as a former CFO in this whole transition process?

V Balakrishnan: No, I am a small shareholder. I also have the same concerns like all the shareholders. I think the governance standards in the company has deteriorated in the last few years and it has to be set right because Infosys always commanded higher premium because of the governance. I think that is why restructuring the board, getting new people who have got impeccable track record will solve the problem.